Tuesday, November 17, 2009

SunPower Corp (SPWRA) is investigating millions of dollars in accounting mistakes over the past three quarters, the U.S. solar module maker said on Monday, sending its stock down as much as 8 percent.

The Silicon Valley-based company said its audit committee had started an investigation after an internal review of its Philippine manufacturing operations found that there may have been unsubstantiated accounting entries.

U.S. companies across an array of industries have reported accounting problems in recent weeks, in a sign that the pressures of doing business in a recession are taking a toll on bookkeeping. [ID:nN28329348] [ID:nN14307036]

The SunPower audit committee's preliminary findings were $1 million of overstated expenses in the first-quarter costs of goods sold, along with understated expenses in costs of goods sold of $14 million in the second quarter and $2 million in the third quarter....MORE

FBR analyst says, "Although SPWRA's announcement from last night regarding the possibilities of restating some of the past quarterly financial reports may be purely a reflection of conservative accounting and governance procedures, we still find it prudent to move to the sidelines (for now) until the company provides additional color/details behind the accounting errors (particularly as they relate to the "cost" recognition for the operation in the Philippines)....MORE

Piper analyst says, "SPWR announced accounting errors that may have underestimated costs in its Philippine manufacturing plant for both 2009 and 2008. The magnitude of the COGS understatement could be $14M in q2, $15M ytd, and $9M in 2008. Given the magnitude of the changes to COGS, and the investor controversy of SPWR's higher cost structure relative to Chinese OEMs, we move our rating to Neutral and lower our PT to $31 on potentially higher costs. We believe the stock will likely remain penalized until further information is disclosed. The company is not providing further color on the nature of the error. We will reconsider our rating once the magnitude and scope of the accounting audit are complete, at least 30 days per the company press release.">>>MORE